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Possible Impacts of Global Climate Change Policy
on Mexico and other Developing Countries in Coming Years
Prof. Jeffrey Frankel, Harvard University
April 7, 2008+
Originally written on the occasion of the World Economic Forum meetings
in Cancun, Mexico, April 14-15, 2008
Executive Summary
Mexico and other middle-income countries will face four impacts
from the ongoing efforts to address the problem of Global Climate Change:
(1) Spillovers. These include:
a. a downward effect on the world price of oil,
b. an upward effect on the price of corn, and
c. opportunities in energy-intensive industries (such as aluminum
smelting, cement, and steel) which will become less competitive in
countries that have to raise their energy prices in order to fulfill
their Kyoto Protocol obligations.
(2) Opportunities to sell credits under the Clean Development Mechanism
(3) Tremendous pressure to adopt formal quantitative targets for emissions.
(4) Efforts, in various industrial countries that are worried about foreign
competition, to enact border taxes or other penalties against imports of
carbon-intensive products from countries like Mexico that have not
adopted targets.
After years of largely empty promises among rich countries regarding Global
Climate Change, the climate for serious policy action is rapidly heating up. In the
United States, the candidates in the 2008 presidential election agreed on the need for new
measures, a domestic cap-and-trade program at a minimum and possibly participation in
a successor agreement to the multilateral Kyoto regime that set rich-country emission
levels for the period 2008-2012. In Europe, policy-makers are grappling with their
already-binding targets in a more serious and analytically-supported way than they did in
1997 (or than US policy-makers are doing today), and the price of carbon has become a
real factor in European firms’ decision-making.
Middle-income countries like Mexico are likely to have to confront the climate
change issue quite soon. I am not referring to the fact that climate change is expected to
do more damage to tropical and agrarian countries than those in the north; these effects
will take years to become large. I refer rather to ways in which awareness and actions by
the industrialized countries will impact middle-income countries economically.
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Most likely the most serious efforts to address climate change will remain within
the framework of the Kyoto Protocol and successor agreements, under the UN
Framework Convention on Climate Change. Thus they will entail quantitative targets
for emissions of greenhouse gases (GHGs) by participating countries, leaving it to each
national government how to attain its targets, and allowing international trading of
emission permits.1
Four likely sorts of economic impact on developing countries
During the budget period 2008-2012 only so-called Annex I countries have
quantitative obligations, that is, industrialized countries (excluding the United States
which did not ratify the Kyoto Protocol). Nevertheless, four sorts of economic impacts
on developing countries are likely.
First, is spillover effects. The most important spillover effects are forms of
leakage of emission cuts among participating countries. The effect of measures to
reduce GHGs in the participating countries should be to lower the world price of oil and
coal, and raise the world price of natural gas, relative to what they would otherwise be.
(Implementation measures would raise the price of oil to the European or Japanese
consumer, reducing world demand for oil, and thereby reducing the price in nonparticipating countries. Of course there are plenty of other factors that drive energy
prices as well, such as political risk, supply constraints, and world growth.) The
downward influence in the world price of oil would, in itself, have some negative
economic impact on Mexico, ignoring the environmental implications. Another form of
leakage is that energy-intensive industries, such as aluminum smelting, cement, and steel
would tend to migrate to countries not covered by the Protocol. This leakage, could in
itself, create positive economic opportunities for Mexico, again ignoring the
environmental implications
There are less direct spillover effects as well, many of them hard to predict ahead
of time. American subsidies for corn-based ethanol have helped drive up the price of
corn worldwide, which has in turned raised tortilla prices in Mexico.
The second area of impact is trading in credits under the Clean Development
Mechanism (CDM). Under this feature of the Protocol, countries such as Mexico that
have not taken on quantitative target can still sell to participating countries credits for
approved projects, like preserving tropical forests and cleaning up power generation.
Recently registered projects in Mexico include a methane capture plan at Coahuila.
Pemex has proposed a variety of CDM projects. I must say that I, personally, have
always been skeptical of the effectiveness of the CDM at achieving its environmental
goal.2
1
Many economists would prefer alternatives such as a global carbon tax, while the Bush Administration
would prefer purely voluntary measures. But neither of these two approaches is likely to prevail.
2
Regarding CDM, JI, or other project-based credits, the problems of baselines and “additionality” are in
my view nearly insurmountable. The use and abuse of such provisions may only undermine the
respectability of international trading of emission permits – for countries that have agreed to baselines –
2
Third, there will be tremendous pressure on the United States, on the one hand,
and the most important developing countries on the other hand, to adopt formal
quantitative targets. China, and to some extent India, are receiving the most attention
because of their great size (population) and rates of growth (GDP); China is now
passing the United States as the world’s largest emitter, far ahead of schedule. The
United States won’t sign on to binding quantitative commitments unless China, for one,
signs on. Korea has far higher income per capita, and indeed its new president has
announced the intention that Korean emissions flatten out immediately and turn down – a
plan that is too ambitious to be practical from an economic viewpoint, and yet
insufficiently aggressive to satisfy environmentalists, as is so often the case. It seems
inevitable that Brazil and Mexico will be included in the group of countries that are
expected to take on early commitments, perhaps as early as 2012.
Fourth, the next big new controversy is likely to be efforts in various industrial
countries that have adopted targets, and are worried about foreign competition from those
who have not, to adopt border taxes or other penalties on imports of products judged to
be carbon-intensive.
This memo leads up to an elaboration of the third and fourth kinds of impact .
The question of participation by developing countries
The international climate change regime needs to include developing countries
into the system for three reasons, which are spelled out in Addendum 1.
The developing countries, for their part, point out correctly that it was the
industrialized countries not they, who created the problem of Global Climate Change,
and they should not be asked to limit their economic development to pay for it. The
developing countries are said to have contributed only about 20 percent of the carbon
dioxide that has accumulated in the atmosphere from industrial activity over the past 150
years.3 Then there is the point that developing countries will bear a disproportionate
share of the cost, because they are hotter and dryer already, and more dependent on
agriculture. In this sense, they could be asking for compensation, rather than being asked
to share the sacrifice. Moreover, in contrast to richer countries, they do not have the
ability to pay for emissions abatement. Developing country governments properly
consider the raising of their people’s economic standard of living the number one
priority. Achieving this objective requires raising market-measured income as well as
improving the local environment, particularly reducing air and water pollution.4
where there is at least a hope of compliance because there is at least something to comply with (as opposed
to deals to buy pieces of paper with no property rights).
3
It has been estimated that if one accounts for the contribution of land use change and deforestation to the
atmospheric build-up of CO2, developing countries are in fact responsible for about 43% of all CO2 in the
atmosphere now. Austin, Goldemberg, and Parker (1998).
4
In their more unrealistic moments, some spokesmen for developing countries argue that equity requires
setting quantitative targets at equal amounts per capita. It is true that equity in itself suggests moving in
this direction. In fact this proposal would not even take into account that the industrialized countries have
done most of the emitting to date while the environmental damage falls disproportionately on the already-
3
It is hard to disagree with these arguments. But “meaningful participation” in the
Kyoto system need not entail economic sacrifice by developing countries, at least not for
some decades to come. This argument is not based on diplomatic or political “happy
talk,” but on sound economic logic, as we shall see.
The gains from trade
If developing countries were to join a Kyoto-like system of targets-with-trading, it
would not only have environmental and economic advantages for the rest of the world; it
would also have important environmental and economic advantages for the developing
countries themselves. For the sake of concreteness, consider a plan under which
developing countries do no more than commit to their “business as usual” (BAU)
emission paths and join the trading system. To make it even more real, think of it as a
commitment that Mexico and other major developing countries would be asked to make
very soon, for the ten-year period 2010-2020.
The first thing to notice is that this commitment is not going to hurt developing
countries. Mexico would have the right to emit whatever amount it would have emitted
anyway. It need not undertake emission reductions unless a foreign government or
foreign corporation offers to pay it enough to persuade it voluntarily to do so.
One anticipates that foreigners would indeed offer to pay Mexico enough to
persuade it voluntarily to reduce emissions below its BAU paths. The reason is that it
could expensive for the US, Europe and Japan to reduce emissions below 1990 levels if
the reductions are made only domestically. But the cost of reductions is far lower in
China or Mexico. Thus governments and corporations in industrialized countries will be
able to offer terms that make emission reductions economically attractive to these
countries. The economic theory behind the gains from trading emission rights is
analogous to the economic theory behind the gains from trading commodities. By doing
what they do most efficiently, both sides win.
Why is it cheaper to make reductions in developing countries than in the United
States? One major reason is that, in industrialized countries, one would have to scrap
coal-fired power plants far in advance of their 40-year useful life, in order to replace them
with natural gas facilities or other cleaner technologies. This would be expensive to do,
because it would mean wasting a lot of existing capital stock. In more rapidly growing
countries, by contrast, it is a matter of choosing to build cleaner power-generating plants
to begin with, instead of building coal-fired plants (in the case of China; or oil-fired
plants in the case of Mexico). When contemplating large increases in future demand for
energy, it is good to be able to plan ahead. The benefits include learning from the
hot, largely agrarian, poor countries. But the rich countries would never accept the huge effective
transfer of wealth from them to the poor that is implicit in the per capita formulation. The status quo of
high emissions from rich countries cannot be ignored, because the status quo is the fall-back position when
international negotiations fail (the “threat point” in the language of game theory).
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mistakes of others that have gone before, and taking advantage of their technological
advances.5
Reductions relative to BAU, in subsequent budget periods
Developing countries will be asked to accept targets that are more stringent than
BAU, especially in later budget periods. A sample guideline, again for concreteness, is
that countries might be expected to agree to reductions from BAU when their levels of
emissions of carbon exceed 1 ton of carbon per capita. Latin America in the aggregate
is expected to cross this threshold sometime soon after 2020.
The final outcome of negotiations to set such targets would probably be
determined by give-and-take-bargaining among the parties, such as took place among the
countries that accepted targets at Kyoto. What would be a reasonable level where a
negotiated compromise might converge? A fair target for developing countries might be
one that fits whatever pattern tends to hold among the existing targets agreed at Kyoto.
Even though the emission targets agreed at Kyoto reflected the outcome of political
negotiations, rather than economists’ calculations of some definition of optimality, it is
possible to discern systematic patterns in the numbers. This approach turns out to allow
some progressivity, with richer countries making larger reductions than poor ones. Yet it
does not go nearly so far as the massive redistribution of wealth that some poor-country
representatives unrealistically ask for.
Out of 30 industrialized countries’ targets agreed at Kyoto (those with adequate
data), the average reduction from BAU was 16%. For the less-rich half of the countries,
the average reduction was 5% below BAU, which shows the progressivity in a very
simple way.
Statistical analysis can help us understand the progressivity of the targets. To
explain the targets chosen, we use control for variables such as per capita income. The
statistical analysis exhibits a pattern of progressivity: each 1% increase in per capita
income implies a 0.11 to 0.17% greater sacrifice, expressed as greater emissions
reductions from BAU. In absolute terms, an increase in income is associated with an
increase in the level of the emission target. But we know that an increase in income also
implies an increase in the BAU level. The reason we get our key result, that richer
countries are making greater sacrifices, is that the increase in the assigned target is less
than the increase in BAU. These results are statistically significant.
5
An extreme example of how measures to reduce carbon emissions can have low costs in developing
countries is the case of subsidies to fossil fuels, especially coal, which is the most carbon-polluting form of
fuel. Eliminating such subsidies would create substantial immediate benefits – fiscal, economic, and
environmental – even before counting any benefits under a Kyoto agreement. (Mexico apparently does not
subsidize coal or petroleum products, but does subsidize gas. Saunders and Schneider, 2000.)
5
Figure 1: The targeted reductions from BAU agreed to at Kyoto were progressive with respect to income
I have developed further ideas for formulas that would set targets for countries
joining Kyoto. As an illustrative example, when the pattern is extrapolated to Latin
America, in one calculation the projected target is about 4 percent below BAU. The
formulas in subsequent budget periods would put gradually decreasing weight on BAU or
emissions in the year of agreement. During an intermediate period, they would put
increasing weight on the 1990 level of emissions, as called for in the Kyoto Protocol.
This forces emissions to peak in absolute terms and then turn down. In the longer run, as
the 21st century progressed, the formulas would assign increasing weight to the criterion
of equalizing emissions per capita across country targets, thereby moving in the direction
of the sort of equity desired by developing countries.6
Resolving concerns about unintended target stringency
One important objection to accepting any quantitative targets concerns
uncertainty regarding how stringent targets would turn out to be. Calculations regarding
the BAU path or the cost of deviations from it are subject to great imprecision and
unpredictability. Poor countries worry that uncertainty surrounding their forecasted
economic performance is so great that they cannot in 2008 risk adopting an emissions
target that would be binding five or ten years in the future. Even if a particular numerical
target appears beneficial ex ante, it might turn out to be something different ex post. If
the country turns out to achieve unexpectedly rapid growth, the last thing it wants is to
have to put a stop to it because the accompanying emissions threaten to overrun the
target. A response to this concern would be to structure international agreements on
these countries’ targets to reduce the risk of being inadvertently stringent.
Symmetrically, environmentalists have also expressed a concern on the other side,
that a target may turn out ex post to be too lax. They fear that such a target might fail to
result in environmental benefits in terms of actual emissions reductions relative to what
would have happened in the absence of a treaty. Thus, it is desirable to mitigate the risk
6
Frankel and Aldy (2004), Frankel (2007, 2008).
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of inadvertent stringency while also mitigating the risk of inadvertent laxity – to narrow
the variability of the effective stringency of the target without relaxing or tightening the
intended target itself.
One solution is indexation of the emissions target. The general notion is to agree
today on a contract under which the numerical target depends in a specified way on
future variables whose values are as yet undetermined.7 Future economic growth rates
are probably the biggest source of uncertainty. A simple format would index a country’s
aggregate emissions to future income alone. Other possible proposals include in the
formula other variables like population.
More specifically, for every percentage point in GDP growth that is higher or
lower than forecast, the emissions target is raised or lowered by a corresponding amount.
If the relationship were fully proportionate, this rule would be equivalent to what is called
an emissions efficiency standard or intensity target. But a better formula would make the
adjustment a little less than proportionate.8 The proposal would require countries that are
doing a bit better to contribute more than those that are not, maintaining principles of
progressivity and insurance without penalizing them unduly for their success.
Indexation is only one possible approach to removing some of the economic
uncertainty that holds back commitment to a quantitative emission target. Another
possible idea, suitable for any country that is willing to implement its program for
meeting its targets via a carbon tax or tradable permit system, is an escape clause or
safety valve. This mechanism eases the quantitative limit when the price of carbon
threatens to rise above a pre-agreed threshold. These solutions to the uncertainty
problem would make it more likely that the target will turn out to fall within the range
intended, where it brings benefits – both environmental and economic – to developing
countries and industrialized countries alike.
Penalties by participating countries against imports from others9
Some important industrialized countries are considering border tax adjustments to
offset effects of specific domestic GHG taxes on competitiveness of its industry vis-à-vis
countries that, like Mexico, are not covered by emission targets.
The contemplated application of trade barriers is furthest advanced in the case of
the EU. French President Sarkozy warned in January: “…if large economies of the
world do not engage in binding commitments to reduce emissions, European industry
will have incentives to relocate to such countries…The introduction of a parallel
mechanism for border compensation against imports from countries that refuse to commit
7
An analogy is a cost-of-living adjustment clause in a labor contract. It specifies a given increase in the
wage for every rupee increase in the Consumer Price Index – thus reducing uncertainty over real wages.
8
For example, every 1 percent of extra growth might call for an automatic 0.7 percent increase in the
target. (Or the coefficient could be 0.5, which would make the formula into a simpler “square root” rule.)
9
This section draws in part on Frankel (2005).
7
to binding reductions therefore appears essential, whether in the form of a tax adjustment
or an obligation to buy permits by importers. This mechanism is in any case necessary
in order to induce those countries to agree on such a commitment.”10
Subsequently the EU agreed: “Energy-intensive industries which are determined
to be exposed to significant risk or carbon leakage could receive a higher amount of free
allocation or an effective carbon equalization system could be introduced with a view to
putting EU and non-EU producers on a comparable footing. Such a system could apply
to importers of goods requirements similar to those applicable to installations within the
EU, by requiring the surrender of allowances.” 11
Less legitimate are possible applications of trade barriers by US.12 Of 12 marketbased Climate Change bills introduced in the 110th Congress, almost half called for some
border adjustment: either a tax applied to fossil fuel imports or permit requirement for
energy-intensive imports.
Another example: the Energy Independence & Security Act
2007 (Section 526) “limits US government procurement of alternative fuel to those from
which the lifecycle greenhouse gas emissions are equal to or less than those from
conventional fuel from conventional petroleum sources.”13
Would such measures be compatible with the global trade regime? Clearly a
country taxing domestic coal production (or raising the price through a tradable permit
system) can apply an equivalent tariff to imports of coal. But can measures be directed
against CO2 emissions in other countries, as embodied in electricity, or in goods
produced with it? Such import barriers would be aimed at what are called PPMs
(Processes and Production Methods). They were not found to be GATT-consistent, for
example in the famous case where the US had tried to protect dolphins by keeping out
Mexican tuna. What about under the WTO, whose founding agreements granted more
respect to the environment? Appendix 2 offers three precedents relevant to the
proposition that penalties against PPMs such as GHG emissions can be consistent with
the WTO (though environmentalists have done a poor job building on these PPM
precedents). For penalties against imports from developing countries like Mexico to be
acceptable under the WTO they would have to be properly designed. They are more
likely to be WTO-consistent if they are :
(i)
(ii)
(iii)
(iv)
imposed by Kyoto ratifiers like the EU, rather than the US
multilateral rather than unilateral
imposed against sectors directly relevant to the goals of Kyoto, particularly
energy-intensive manufactures, than imposed as sanctions on unrelated trade
non-discriminatory.
10
letter to Barroso, January 2008.
Source: Paragraph 13, Directive of the European Parliament and of the Council amending Directive
2003/87/EC so as to improve and extend the EU greenhouse gas emissions allowance trading system;
Brussels, January 2008.
12
Source: Resources for the Future.
13
Source: FT, Mar. 10, 2008. Canada’s oil sands are vulnerable.
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Even in the best of circumstances, there would be difficulties. It would be hard to
determine carbon content of manufactures. The biggest danger is that each country
would impose border measures in whatever way suits national politics, so that they come
out poorly targeted, discriminatory, and disguisedly protectionist. In this case they would
deserve to run afoul of the WTO.
Of course the United States is perfectly capable of misappropriating the
environmental banner out of economic motivations (ethanol subsidies). It could impose
barriers against Mexico in the name of global climate protection even if contrary to
international agreements.
Policy Conclusions
It is possible that Mexico will soon find itself on the wrong end of partners’
import barriers that are labeled as efforts to equalize the cost of measures reducing
emissions of greenhouse gases. The justification will be to avoid leakage of emissions
and loss of competitiveness by energy-intensive industries in the partner country. Quite
one such partner country will be the United States. The exercise would be hypocritical if
the US has itself still not taken serious efforts such as ratifying the Kyoto Protocol. The
import barriers might come as part of legislation to address climate change, such as the
bills proposed by Senator Lieberman in 2007-08; or it might come as part of efforts to
“renegotiate NAFTA” as discussed during the campaign by Senator Obama.
If such measures are thinly disguised protectionism, Mexico may be able to take
the case to the WTO. But the broader political issue must be taken seriously, whether
the threat is hypocritical or ingenuous. Neither the WTO nor anyone else will want to
get caught on the wrong side of the climate change issue in coming decades, if it can help
it.
Developing countries quite rightly point out that they should not have to agree to
binding numerical cuts in emissions before the rich countries do so. Meanwhile, it is
clear that the United States will not ratify a Kyoto successor regime if major developing
countries do not accept binding quantitative limits at the same time.
There is only one way to reconcile the seemingly irreconcilable conflict. In the
budget period that begins in 2013 (that is, in the first budget period in which the US, it is
hoped, agrees to quantitative targets below its BAU path), major developing countries
agree to growth targets, that are set in line with their own BAU paths. The BAU path
(Business as Usual) shows the rate of growth of emissions that experts estimate would
take place in the absence of an international agreement. What is accomplished by this?
Mexico is not hurt, because it can emit as much as it was expected to anyway. In fact it
will probably gain, from the opportunity to sell internationally permits generated by
emission reductions that are cheaper to make at home than on the world market.
Simultaneously, American businessmen and environmentalists should be satisfied
because the arrangement forestalls leakage, that is it prevents Mexican firms from taking
advantage of a higher cost of carbon in the US by raising their own emissions. These
ideas are elaborated in Frankel (2007, 2008).
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Addendum 1: The international climate change regime needs developing countries
Why should developing countries have to worry about mitigating climate change in the
first place (leaving aside worrying about the environmental costs). After all, the UN
Framework Convention says clearly that it is up to the industrialized countries to go first. Three
big reasons.
(1) The developing countries will be the source of the big increases in emissions in
coming years according to the Business-as-Usual path (BAU), that is, the path along which
technical experts forecast that countries’ emissions would increase in the absence of a climate
change agreement. Developing countries will represent up to two-thirds of global carbon
dioxide emissions over the course of this century, vastly exceeding the OECD’s expected
contribution of roughly one-quarter of global emissions. Without the participation of major
developing countries, emissions abatement by industrialized countries will not do much to
mitigate global climate change
(2) If a quantitative international regime is implemented without the developing
countries, their emissions are likely to rise even faster than the BAU path, due to the problem of
leakage. Estimates vary regarding the damage in tons of increased emissions from developing
countries for every ton abated in an industrialized country. But an authoritative survey concludes
“Leakage rates in the range 5 to 20 per cent are common.”14
And (3) the opportunity for the United States and other industrialized countries to buy
relatively low-cost emissions abatement from developing countries is crucial to keep the
economic cost low. This would increase the probability that industrialized countries comply with
the system of international emissions commitments. Indeed the United States won’t join a
Kyoto-like agreement in the first place if developing countries don’t accept analogous targets.
Addendum 2: Precedents for WTO-consistent border measures against GHG emissions
There are three relevant precedents.
(1) The Montreal Protocol on stratospheric ozone depletion. Trade controls were written into
the agreement, with two motivations: (i) to encourage countries to join, and (ii) if major
countries had remained outside, would have minimized leakage, the migration of production
of banned substances to nonparticipating countries. In the event, (i) worked, so (ii) was not
needed. 15
(2) The famous shrimp-turtle case was the most important WTO case establishing that a country
( the U.S.) can apply trade penalties (against imports of Asian shrimp) when the goal is a
foreign PPM (protecting sea turtles in the Indian Ocean). These two cases shows that there
is a stronger presumption that measures targeted on environmentally destructive activities in
other countries are more likely to be acceptable if the externality is global (CFCs/Ozone or
shrimp/turtles), as is CO2 .
(3) A new WTO Appellate Body decision (December 2007) regarding Brazilian restrictions on
imports of retreaded tires confirms that WTO Article XX(b) includes climate change:
Rulings “accord considerable flexibility to WTO Member governments when they take traderestrictive measures to protect life or health… [and] apply equally to issues related to trade
and environmental protection…including measures taken to combat global warming.”16
14
International Panel on Climate Change (2001), Chapter 8.3.2.3, pp. 536-544 .
A black mark on the Montreal Protocol has been the insistence by the United States that it be allowed to
use methyl bromide, a potent destroyer of the ozone layer, so that its strawberry farmers , for example, will
not be at a cost disadvantage against Mexican competitors.
16
Brendan McGivern, 12 Dec. 2007.
15
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References
Austin, D., J. Goldemberg, and G. Parker. 1998. Contributions to Climate Change: Are
Conventional Metrics Misleading the Debate. World Resources Institute Climate Notes,
October.
Frankel, Jeffrey, “Kyoto and Geneva: Linkage of the Climate Change Regime and the
Trade Regime,” KSG RWP04-042. Published as "Climate and Trade: Links Between
the Kyoto Protocol and WTO," in Environment, vol. 47, no. 7, September 2005: 8-19.
Frankel, Jeffrey, “Formulas for Quantitative Emission Targets,” in Architectures for
Agreement: Addressing Global Climate Change in the Post Kyoto World, edited by Joe
Aldy and Robert Stavins, Cambridge University Press, 2007, 32-56.
Frankel, Jeffrey, “An Elaborated Proposal For Global Climate Policy Architecture:
Specific Formulas and Emission Targets for All Countries in All Decades,” for the
Harvard Project on International Climate Agreements, October 2008.
Frankel, Jeffrey, and Joe Aldy, “Designing a Regime of Emission Commitments for
Developing Countries that is Cost-Effective and Equitable,” written for G20 Leaders and
Climate Change, Council on Foreign Relations, September 20-21, 2004.
Saunders, Matthew, and Karen Schneider, “Removing Energy Subsidies in Developing
and Transition Economies,” ABARE Conference Paper 2000.14, Australian Bureau of
Agricultural and Resource Economics, June 2000, Table 1, page 4.
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